Wetherspoon chilly on outlook as smoking ban hurts
By Marc Jones
LONDON (Reuters) - Pub group JD Wetherspoon
Wetherspoon, which has almost 700 pubs in the UK, said like-for-like sales fell 1 percent in the 13 weeks to October 28 but rising food sales cushioned a drop in bar sales.
"Food has continued to be double digit positive similar to what we said in August but bar sales, which had strayed into single digit negative territory, have slid back a bit further to the higher end of single digits," Chief Executive John Hutson told Reuters.
Shares in the firm, which along with the rest of the pub sector <.FTASX5750> have been steadily sliding since May, dropped 3 percent in early trade to a year-low of 488.75 pence.
This year’s wet summer, compared to last year’s heat wave which coincided with the soccer World Cup, has also hurt sales.
"One of the things to note is that this time last year like-for-like sales were up 9 percent so we are up against a very strong quarter," said Hutson.
"The operating margin has declined by 0.6 percent... The change in the bar/food sales mix has affected the margin a bit and also interest rates have impacted," he added.
Analysts had already braced themselves for a downturn in sales.
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"The post-ban honeymoon along with the likelihood that it would end in September or October was widely suggested and this would appear to be in the process of happening," said Blue Oar analyst Mark Brumby."With the weather forecast to turn a little chillier this week, this process could accelerate and sales may well remain under pressure," he added.
But Hutson said he expected sales in England to recover, mirroring Scotland where sales settled around 5 percent higher a year and a half after a ban on smoking was introduced there.
"We remain confident that smoking ban is good for the pub trade and Wetherspoon and we see nothing to change our mind," he said.
By Marc Jones
LONDON (Reuters) - Pub group JD Wetherspoon
Wetherspoon, which has almost 700 pubs in the UK, said like-for-like sales fell 1 percent in the 13 weeks to October 28 but rising food sales cushioned a drop in bar sales.
"Food has continued to be double digit positive similar to what we said in August but bar sales, which had strayed into single digit negative territory, have slid back a bit further to the higher end of single digits," Chief Executive John Hutson told Reuters.
Shares in the firm, which along with the rest of the pub sector <.FTASX5750> have been steadily sliding since May, dropped 3 percent in early trade to a year-low of 488.75 pence.
This year’s wet summer, compared to last year’s heat wave which coincided with the soccer World Cup, has also hurt sales.
"One of the things to note is that this time last year like-for-like sales were up 9 percent so we are up against a very strong quarter," said Hutson.
"The operating margin has declined by 0.6 percent... The change in the bar/food sales mix has affected the margin a bit and also interest rates have impacted," he added.
Analysts had already braced themselves for a downturn in sales.
"The post-ban honeymoon along with the likelihood that it would end in September or October was widely suggested and this would appear to be in the process of happening," said Blue Oar analyst Mark Brumby.
"With the weather forecast to turn a little chillier this week, this process could accelerate and sales may well remain under pressure," he added.
But Hutson said he expected sales in England to recover, mirroring Scotland where sales settled around 5 percent higher a year and a half after a ban on smoking was introduced there.
"We remain confident that smoking ban is good for the pub trade and Wetherspoon and we see nothing to change our mind," he said.
© 2008 Reuters Click for restrictions
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